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November Was The Worst Month For Crude Since Lehman

Tyler Durden's picture




 

November's asset performance can best be summarized in three words: oil, oil, oil. Deutsche Bank explains why:

There were some pretty big moves in markets last month with Oil clearly under the spotlight. Indeed Brent and WTI were down 18.3% and 17.9% in November with the most recent leg lower driven by OPEC's decision not to cut production volumes. For Brent November was the biggest one month decline since the height of the Lehman crisis in October 2008 whilst for WTI it was the worst since December 2008.

Brent and WTI are now 33% and 28% lower versus where it started the year and are now trading at their lowest level since the spring of 2010. Away from oil the month was also generally weak for commodities which coincides with the 5th consecutive monthly gains for the USD. Copper and Silver were down -6% and -4% respectively although Gold managed to find better support, only down 0.5% in November. On FX, JPY was a clear underperformer amongst major currency pairs following the recent surprise monetary easing announcement.

On the positive side we did see equities generally rally higher in November as well as seeing another positive month for core fixed income markets. The Shanghai Composite (11%) posted its 7th consecutive month of gains this year with November being the best month since Dec 2012. Indeed with a YTD total return of around 31% the Shanghai Composite is returning more than twice that seen from the S&P 500 (+14.0%) and over 3 times more than the Stoxx600 (9%) and the Nikkei (9%) this year. The expectations of easier monetary policy to come as well as greater investor participation via the SH-HK stock connect were possibly behind those gains.

Away from equities, core government bond markets in the US, UK and Germany produced positive total returns of 1.0%, 3.2%, and 0.9%, respectively. With the exception of US HY, credit benchmarks on both sides of the pond have generally delivered positive total returns in November although much of that is still driven by the rally in core rates. US HY (-0.8%) had a weak November after a positive month in October not helped by the performance in HY oil credits as well as seeing some mild outflows. Staying in Fixed Income, EM bonds saw negative returns in Latam (-2.5%) and EEMEA (-0.9%). Asia (+0.3%) was a relative outperformer as the region, as a net importer of energy, probably benefitted from the recent sell-off in Oil prices.

 

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Mon, 12/01/2014 - 12:46 | 5504795 HedgeAccordingly
Mon, 12/01/2014 - 12:48 | 5504809 knukles
knukles's picture

Great charts, Tyler. 
Might note that there is a big disparity between "Treasury" and long treasuries which just the other day were up some 17% or so YTD.  Long munis done well, too.  Likewise, globally as all the term structures have fallen and flattened.
Thanks again.
Great work!
K

Mon, 12/01/2014 - 13:32 | 5504997 J S Bach
J S Bach's picture

Hey, crude speculators!  Join the bear party!  PMs have been here for quite a while.  Where've you been?

At least the crude oil price is mostly driven by lower demand... whereas the PM prices are driven by desperate counterfeiters.

Mon, 12/01/2014 - 14:50 | 5505369 kaiserhoff
kaiserhoff's picture

CORRECTION:

  November was the best month  for oil prices since Lehman.

   My bank account thanks you very much;)

Mon, 12/01/2014 - 13:31 | 5504992 Notsobadwlad
Notsobadwlad's picture

If Obumbdumb cared about Africa he would never have sanctioned the murder of Gadhafi and the overthrow of the North African country governments. They were building a more stable and prosperous Africa through their coalition.

No, Obama and his masters want African slaves who are always fighting each other and serving their masters by digging raw material wealth out of the ground for them.

Once again, there is a big difference between what the asshole says and what he does.

Mon, 12/01/2014 - 12:47 | 5504798 PartysOver
PartysOver's picture

And who said wars were not started over oil.......

Mon, 12/01/2014 - 12:51 | 5504812 pendragon
pendragon's picture

PPT buying WTI?

Mon, 12/01/2014 - 12:53 | 5504820 LawsofPhysics
LawsofPhysics's picture

Yes, but I thought that the MIC and the energy companies were tight.  Why are more bankers having "accidents"? 

Mon, 12/01/2014 - 12:54 | 5504827 blown income
blown income's picture

Who the fuck is running up oil...or is that short covering...jhheezzz better go fill up before it shoots back up 60 cents a gallon

Mon, 12/01/2014 - 12:54 | 5504830 Soul Glow
Soul Glow's picture

Telling.

Mon, 12/01/2014 - 12:56 | 5504834 FuzzyDunlop21
FuzzyDunlop21's picture

What the hell happened with Shanghai Composite this month. Someone clue me in? Was it because of the rate cut?

Mon, 12/01/2014 - 12:58 | 5504842 Tsar Pointless
Tsar Pointless's picture

Oil off the lows - well off the lows - of the day, up over $4.50 in the past five hours.

Efficient markets.

Mon, 12/01/2014 - 13:06 | 5504880 Bell's 2 hearted
Bell's 2 hearted's picture

NY Times on holiday sales weekend

 

after scraping off some of the lipstick in article:

 

Executives at the retail federation, which had predicted strong growth in sales this holiday season, appeared at a loss to fully explain the drop-off.

The results could show that “there are a significant number of Americans out there for whom the recession is not yet over,” said Matthew Shay, the group’s president and chief executive.

 

...

 

“This year is really slow, there’s a big difference from even last year,” said a Kmart customer service manager, Indira Reyna, 44, who said she had worked the day after Thanksgiving for most of her 13 years on the job. “It’s never been this slow. We still have all these deals.”

 

http://www.nytimes.com/2014/12/01/business/thanksgiving-weekend-sales-at...

Mon, 12/01/2014 - 13:35 | 5505004 Notsobadwlad
Notsobadwlad's picture

There is an excess of retail. In a free market, this excess would be blown away through bankruptcy. In today's economy, it is purchased and refinanced to even greater heights of stupidity.

Mon, 12/01/2014 - 13:37 | 5505014 ebworthen
ebworthen's picture

Another "since Lehman" indicator; c'mon S&P 666!

Mon, 12/01/2014 - 13:39 | 5505020 FrankieGoesToHo...
FrankieGoesToHollywood's picture

Or the best if you like to drive.

Mon, 12/01/2014 - 13:39 | 5505022 SmokinMonkey
SmokinMonkey's picture

Commodities collapse signals another worldwide depression on the way.  Oil is telling us just how fake this recovery has been.  

Mon, 12/01/2014 - 15:08 | 5505052 Randy Goodnight
Randy Goodnight's picture

Hey ZH, don't get your knickers in a twist. (Everything has taken such a dramatic twist with you guys lately.) The US war machine is just warming up, oil will be back to $100 in no time.  

OK, let the down votes commence.

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